updated 05:00 pm EDT, Fri March 28, 2008
Warner on Flat Music Fee
Warner Music Group has revealed that it's in the midst of developing an organization that it hopes will turn around mounting losses at traditional music labels. Headed by former Geffen label head Jim Griffin, the unnamed effort would take the concepts behind Universal's Total Music to a more label-independent format. Rather than send music to one label, customers of the service would see a fee for unlimited music downloads bundled into the cost of the Internet service that would be used for a general money pool; the money would then be distributed across all labels to compensate both themselves and the artists as they see fit.
Griffin noted that nothing was set in place as to pricing or other details, but explained that even a small fee would create more money than today's segmented industry. At $5 per month, the plan would offer about $20 billion in total revenue versus the $10 billion of the existing market. Poorer countries could charge far less but still make up for the difference through sheer population numbers, while at a certain point users might also have the option of completely free music in exchange for ads.
The proposal has already drawn criticism that suggests the service would be a "tax" on users for music and protect the major labels, whose wider catalogs would make it difficult for independents to join the pool and take a share of revenue. However, Griffin explained that Warner wouldn't seek to make the fee mandatory through the government or other means.
The label official also added he was contracted to develop the organization managing the service over the course of three years and that he believed labels should avoid filing lawsuits against individuals, which he believed did nothing but antagonize potential customers.